10-QPeriod: Q2 FY2013

OCCIDENTAL PETROLEUM CORP /DE/ Quarterly Report for Q2 Ended Jun 30, 2013

Filed August 5, 2013For Securities:OXYOXY-WT

Summary

Occidental Petroleum Corporation (OXY) reported steady financial performance for the second quarter and first six months of 2013. While net income saw a slight decrease year-over-year for the six-month period, ending at $2.7 billion compared to $2.9 billion in 2012, overall operational cash flow improved. The company generated $6.2 billion in operating cash flow for the first six months of 2013, an increase from $6.0 billion in the prior year, driven by strong operational performance and a favorable shift in non-cash items like DD&A and deferred taxes. Key financial events during the period included the sale of its investment in Carbocloro for $270 million, resulting in a $131 million pre-tax gain, and a $55 million pre-tax charge related to executive and employee terminations following a leadership change. The company maintained a robust liquidity position with $3.1 billion in cash and an undrawn $2.0 billion credit facility, indicating a stable financial outlook for meeting operational needs and capital expenditures.

Financial Highlights

46 data points
Beta

Revenue

$5.96B

46.7% Gross Margin

Net Income

$1.32B

22.2% Net Margin

EPS (Diluted)

$1.64

Total Assets

$67.42B

Cash & Equivalents

$3.07B

Free Cash Flow

$1.30B

Financial Statements
Beta
Revenue$5.96B
Cost of Revenue$3.18B
Gross Profit$2.78B
Operating Expenses$495.00M
Operating Income$2.69B
Net Income$1.32B
EPS (Basic)$1.64
EPS (Diluted)$1.64
Shares Outstanding (Basic)804.90M
Shares Outstanding (Diluted)805.40M

Key Highlights

  • 1Occidental Petroleum reported net income of $1.3 billion for Q2 2013, with diluted EPS of $1.64, consistent with the prior year's Q2.
  • 2For the first six months of 2013, net income was $2.7 billion, down from $2.9 billion in the same period of 2012, with diluted EPS at $3.32 compared to $3.55.
  • 3Operating cash flow for the first six months of 2013 increased to $6.2 billion from $5.9 billion in the comparable 2012 period.
  • 4The company sold its investment in Carbocloro for approximately $270 million, realizing a pre-tax gain of $131 million.
  • 5A pre-tax charge of $55 million was recorded in Q2 2013 related to executive and employee terminations.
  • 6Total assets grew to $67.4 billion at June 30, 2013, from $64.2 billion at December 31, 2012, primarily due to an increase in property, plant, and equipment.
  • 7Stockholders' equity increased to $41.9 billion from $40.0 billion, reflecting net income generation partially offset by dividend payments.

Frequently Asked Questions

In the first six months of 2013, Occidental Petroleum reported a net income of $2.7 billion on net sales of $11.8 billion, compared to $2.9 billion in net income on $12.0 billion in net sales for the same period in 2012. Diluted EPS decreased to $3.32 from $3.55. However, cash flow from operations saw an improvement, rising to $6.2 billion from $5.9 billion, driven by strong operational performance and favorable non-cash adjustments.

Occidental Petroleum recorded a $131 million pre-tax gain from the sale of its investment in Carbocloro, a Brazilian chemical facility. Additionally, the company recognized a $55 million pre-tax charge related to employment and post-employment benefits for its former Executive Chairman and the termination of other employees and consulting arrangements.

As of June 30, 2013, Occidental Petroleum had approximately $3.1 billion in cash and cash equivalents. The company also has an undrawn $2.0 billion bank credit facility. Management believes that its cash on hand and cash generated from operations will be sufficient to fund its operating needs, planned capital expenditures, dividends, and debt payments.

The Oil and Gas segment reported pretax operating profit of $2.1 billion, an increase from $2.0 billion in the prior year's second quarter, driven by higher domestic realized prices and lower operating costs. The Chemical segment's pretax operating profit was $275 million, up from $194 million, benefiting from the $131 million gain on the sale of Carbocloro, though underlying operational results were impacted by higher energy costs and weaker export pricing. The Midstream and Marketing segment reported a decrease in pretax operating profit to $48 million from $77 million, mainly due to lower marketing and trading performance.